Ottawa industrial: Q3 absorption fell to 40,000 sf

The quarter the pace broke

CBRE published its Ottawa industrial figures for Q3 on October 8. The headline is an availability rate of 4.2%, up 10 basis points from Q2. Read that next to the last four quarters and it is the first uptick since the peak: 4.9% in Q4 2025, 4.4% in Q1, 4.1% in Q2, 4.2% now.

One quarter is not a trend. But the absorption number underneath it is the one I would not skim past.

Absorption: 181,797, then 156,132, then 40,000

Net absorption is the space tenants took minus the space they gave back. CBRE's quarterly figures for Ottawa:

• Q1 2026: +181,797 sf
• Q2 2026: +156,132 sf
• Q3 2026: +40,000 sf, mostly from the South and East submarkets

That is 377,929 sf for the nine months. Q3 is 25.6% of Q2 (40,000 / 156,132). Against the first-half average of 168,965 sf a quarter, it is 23.7%. In its Q1 report CBRE noted two straight quarters above 100,000 sf, the first since Q4 2023. Q2 made it three. Q3 ended the streak.

It is still positive, and CBRE calls fundamentals "relatively stable." I agree with that word. I just would not call 40,000 sf strong.

Why Q2 may have flattered the run rate

Here is the detail from the Q2 report that I think matters. CBRE said much of Q2's positive absorption came from owners choosing to retain their space rather than from normal leasing. A building that comes off the market because the owner decided to keep it counts as space absorbed. It is not a company signing a lease.

If a chunk of the 156,132 sf was that, the underlying leasing pace was slower than the print, and 40,000 sf is closer to what normal demand looks like. I can't prove that from the Q3 page, which publishes only the availability rate, absorption and one completion. Call it a hypothesis, and the Q3 tables will say more.

What 10 basis points is worth

Ottawa's inventory was 39,059,443 sf in Q2. Ten basis points of that is 39,059 sf. So availability rose by roughly 39,000 sf while 40,000 sf was absorbed. Both can be true because availability counts occupied space that has been listed, including sublease and space for sale, not only empty buildings. More space got listed than leases took off the board. Q2 had 279,565 sf of sublease space and 315,819 sf for sale. Which of those grew is the next thing I want to see. Treat the 39,000 as a rough size, since Q3 inventory isn't published and 103 Schneider Road was added this quarter.

Re-litigating my own August call

In August I wrote that Ottawa is building more industrial than any market in the country and that almost none of it is for a small tenant. The Q2 pipeline backs it harder than I said. Under construction was 3,437,151 sf. The Amazon fulfillment centre in Barrhaven is 3,100,000 sf of that, or 90.2%. Take it out and the rest is 337,151 sf, which is 0.86% of inventory. The only completion CBRE named in Q3, 103 Schneider Road, arrived fully pre-leased to Dominion Dynamics and J-Squared Technologies.

So the cranes are real and the relief is not. Developers are waiting for pre-leasing before they start spec buildings, and CBRE says costs and tariffs are part of why.

Rents, and what I can't update yet

My October 3 look at additional rent used CBRE's Q2 asking net rent of $16.71 and five listings with a median of $8.14 a foot on top. CBRE's Q3 page gives no rent figure, so I won't guess one. If demand has cooled, the first place it should show is rent, and the comparison is 16.35 in Q1 to 16.71 in Q2.

What I would do with it

If you are a tenant, 4.2% availability and a 2.6% vacancy rate in Q2 are still tight. Do not read 10 basis points as leverage. For space under 5,000 sf, CBRE said in Q1 that options were at their lowest since early 2025. That has not obviously changed.

If you own a small industrial building and have thought about selling, the for-sale pool in Q2 was 315,819 sf, or 0.81% of inventory. Scarcity is on your side. The average asking sale price was $319.26 a foot. That is a market number, not a value for your building.

I sell houses and commercial property. I'm not a lease lawyer or a tax adviser, so take any lease clause or capital gains question to the right professional first.

What I will check next

Here is my bet. CBRE's Q4 2026 figures will show net absorption under 100,000 sf and availability between 4.0% and 4.4%. A number above that range means the Q3 dip was noise. I'll score it when Q4 lands, likely in January, and when CBRE posts the Q3 tables I'll look at sublease first.

If you have an industrial unit you are thinking of leasing, selling or buying, call me at 613-262-6545 or write fil@613realtor.ca. I'd rather talk through your actual building than hand you another headline number.